Do you know how you can power up your RRSP throughout your career to have financial freedom after retirement? Keep reading to learn more!
Listen to this Podcast
Six ways to power up your RRSP throughout your career
Why has the Registered Retirement Savings Plan (RRSP) remained so popular over the years? Because it continues to be a tax-efficient way to save money. No matter what point you are at, professionally, the flexibility of this plan offers benefits.
Your Carte Financial Group Advisor can help you leverage the power of an RRSP throughout your career. Here are six ways it can help reduce taxes and grow that important nest egg.
One: Millennials might defer the tax benefits. RRSP contributions are deductible from your taxable income. At the beginning of your career, with a modest salary, this may not seem important. Look ahead, though, to the day when your income matches your ambitions. Your marginal tax rate will also rise ̶ the maximum percentage you must pay in taxes. That’s when you will need some tax deductions. Here are two options to consider.
- The first is deferring your RRSP contributions until later. You can focus on other savings, such as growing a Tax-Free Savings Account. The RRSP contribution room ̶ the amount you can invest annually ̶ will continue to accumulate. You can keep this room for the time when you most need relief from a heavy tax load.
- Or you could start an RRSP now. Because the sooner you begin saving, the bigger your investment will grow throughout your career. Then defer claiming the tax deduction until you need that tax break.
Two: Borrow from yourself to enhance your life. Planning to buy your first home? Or considering getting more education to further your career? These are the two life goals for which you can borrow from your RRSP, tax-free. As long as you repay the money within a set time frame. Ask your Carte Financial Group Advisor for more information, or visit canada.ca to learn about the Home Buyers’ Plan (HBP) and the Lifelong Learning Plan (LLP)
Three: Midlife is time to work that tax strategy. Your career has matured. That long-awaited promotion came with a great raise. Unfortunately, your marginal tax rate has also climbed. Time to power up your RRSP contributions and get the maximum tax credit. With the right planning, you could drop down into a lower marginal tax bracket.
Four: Go for growth. Your RRSP fund needs to be well managed to ensure it grows strongly throughout the years of your career. Work with your Advisor to develop a mix of investments in your fund, for a satisfying growth rate.
Five: Older adults look forward to lower taxes. Throughout your professional life, you’ve been contributing to your RRSP. You’ve enjoyed tax deductions while growing your retirement investment. Taxes owed on the money have been deferred until you begin withdrawing the funds. At that time, most likely, your income will have dropped, and you’ll be in a lower tax bracket.
This is a major benefit of an RRSP. Tax deductions today, and the prospect of less tax to pay in retirement.
Six: Get your golden years planned. Retirement is close. You need to strategize how to enjoy the most income with the least amount of tax to pay. Work with your Financial Advisor on this. Consider any pensions, investments, and your RRSP. Your Advisor will help you plan when to withdraw funds, and from what source, to minimize your tax load.
Use the power of an RRSP to save for tomorrow while enhancing your life today. Book your free 30-minute session with our team to learn more about how we can make this savings strategy work even harder for you, all through your career.
We hope you enjoyed reading our blog post! Check the full live chat here. You can find our live chats and more of the latest financial news on our News Blog. Stay tuned to learn more tips on a new topic each week on our Instagram Live at 5 on Instagram! Aside from our live chats, we post daily financial updates on social media! Follow us on Linkedin, Twitter and Facebook and Instagram.
More Financial News & Events
Managing growth for business owners
May
Are you a lawyer with questions on how to grow your investments?
May
Cultivating a growth mindset around money
May
Why financial growth can be deceptive
May
Home and Financial Document Organization
Apr
Business owners, it’s time to start spring cleaning.
Apr
Spring Cleaning Your Finances
Apr
Unique financial challenges female lawyers face
Mar
Taking Action: A Woman’s Perspective on Deciding To Tackle Her Finances
Mar
Is there a gap in your income protection?
Mar
Knowing the difference between Tax Filer and Tax Advisor
Mar
Conquering Women’s Fears Around Finances
Mar
Trends in Family Law
Feb
PART 2: Financial Conversations Couples Need To Have at Different Life Stages
Feb
Financial Conversations Couples Need To Have at Different Life Stages
Feb
Disruption and Reinvention: Starting a Second Career in your Forties
Jan
How to create a strong financial fortress during market downturns
Jan
Creating a Financial Vision Board for 2023
Jan
5 Tips to set yourself up For Financial Success in 2023
Jan
Year-end Donation strategies
Dec
Year-end tax planning
Dec
Getting clients organized for 2023
Combating Quiet Spending
Nov
Our Client’s Journey to Building Financial Confidence
Nov
How Working with an Advisor can Improve your Confidence
Nov
A letter from the CEO’s desk
Nov
Getting Psychologically Ready for Retirement
Oct
Retirement Planning for Business Owners
Oct
Top Issues Clients Face with Retirement
Oct
What Risk Means for your Investment Portfolio
Oct
Finding Investment Opportunities in the Market
Sep
Behind The Scenes On Helping Our Clients Choose Investments
Sep
How to Deal with Debts Amidst Rising Costs
Sep
Buying and Selling Homes as Prices Fall
Aug
Parenting and Back to School
Aug
Dealing with the high cost of living
Aug
Ask Team Jackie Porter Series – Financial Planning with Jin Lee
Aug
Budgeting for Home Renovations
Jul
Mental Health and Finances
Jul
Planning a Vacation Post Covid
Jul
Dealing with spending pressures
Jun
Behind the Scenes – Working with Lawyers on a Financial Plan
Jun
Positive Experience with Financial Planning – A conversation with Erin Leslie
May
What Are the Process of Putting Together a Financial Plan? – A conversation between Jackie and Jin
May
Creating Financial Transformations
May
Building A Brand Effectively in Second Quarter – A Conversation with Cassie Drake
May
How to boost your business mojo – A conversation with Valeri Hall Little
Apr
How to make a financial fresh start second quarter? 5 principles from Jackie Porter
Apr
The #1 Challenge that Leaders Face, from the Founder of Green Apple Consulting – Lisa Mitchell
Apr
What is entrepreneur resilience? A conversation with Karen Dean
Mar